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PRECIOUS-Gold firm near 15-month top as dollar extends losses

Published 02/05/2016, 04:55 pm
Updated 02/05/2016, 05:00 pm
© Reuters.  PRECIOUS-Gold firm near 15-month top as dollar extends losses
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* Gold steadies, after hitting highest since Jan 2015 on Friday

* Dollar hits fresh 18-month low versus the yen

* Gold could climb to $1,375 this month - INTL FCStone (Updates prices)

By A. Ananthalakshmi

SINGAPORE, May 2 (Reuters) - Gold traded near a 15-month peak on Monday as a tumble in the dollar and weakness in global equities pushed up the metal to near $1,300 an ounce.

Spot gold XAU= was little changed at $1,292.96 an ounce by 0642 GMT, after climbing to $1,296.11 on Friday, the highest level since January 2015.

U.S. gold futures GCcv1 rose 0.4 percent to $1,295.30. They hit a 15-month top of $1,299 in the previous session before paring some gains.

"With the majority of Asia out today and London on holiday tonight we are expecting a range-bound session. However as gold trades towards $1,300, days of thin liquidity can throw up surprises," said MKS Group trader Sam Laughlin.

Several markets are shut on Monday for the Labour Day holiday.

The U.S. dollar slumped to an 18-month low against the yen. The dollar index .DXY , which measures the greenback against a basket of six major currencies, fell for a sixth straight session to hit an eight-month low.

Last week, the dollar had logged its biggest weekly percentage decline against the yen since the 2008 financial crisis in the aftermath of the Bank of Japan's decision not to ease policy further. USD/

Asian shares fell on Monday, with Japan's Nikkei ending the day down 3 percent. Stocks in Europe and Wall Street eased on Friday as earnings disappointed. MKTS/GLOB

Gold was also underpinned by weak U.S. economic data that supported the Federal Reserve's cautious stance on higher U.S. interest rates. The central bank's policy statement released last week was viewed as largely dovish. is sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar.

INTL FCStone analyst Edward Meir said funds will continue to sell the dollar, at least during the first half of May, buoying gold.

"In addition, gold tipped into breakout territory on Friday, meaning that we likely will see more technical buying ... and perhaps see an eventual monthly high of $1,375," said Meir.

Data on Friday showed hedge funds and money managers cut their net long position in gold futures and options in the week to April 26.

They added to their bullish stance in COMEX silver for the third straight week, taking it to a record high. XAG= eased 0.1 percent to $17.80, not far from a 15-month top of $17.958 reached on Friday.

PRICES AT 0642 GMT Metal

Last

Change Pct chg

Spot gold

1292.96

-0.4

-0.03 Spot silver

17.8

-0.02

-0.11 Spot platinum

1071

-3.5

-0.33 Spot palladium

621.45

-3.05

-0.49 Comex gold

1295.3

4.8

0.37 Comex silver

17.855

0.036

0.2

COMEX gold and silver contracts show the most active months

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